Our current economic condition has proven beyond a reasonable doubt that we, as a nation and as individuals, need financial education. It’s an unfortunate truth that many students leave high school or college knowing the molecular weight of a carbon atom, but have no understanding of the difference between an asset and a liability. Which of these proves more useful in their day-to-day lives?

It’s a no-brainer.

An important message
As a member of the President’s Advisory Council on Financial Literacy, it is my goal and the goal of the Council to see that every student receives some form of financial education. We came closer to that goal in March with the introduction of H.R. 1325 by Congresswoman Sheila Jackson-Lee. This widely-supported bill would require every college and university receiving federal funds to provide a four-hour course on financial literacy. This course would be a requirement for every college student receiving a guaranteed student loan.

It’s a big step in the right direction, but we need to work harder to ensure every student gets the financial education they need. Today’s financial crisis might have been avoided if everyone had received basic financial education about good debt versus bad debt. However, changing our educational system takes time — time that we do not have. We all need to stand up and commit to educating our children, grandchildren and youth groups.

How can we teach a subject when so many of us are also in financial trouble? Great resources like Get Rich Slowly provide a wonderful place to begin the journey and learn more both for ourselves and our children. Take the time to review your finances with your CPA, investment advisor, or a financially savvy friend. Learn together as we all start to rebuild during this economic crisis.

Lessons learned
In 1992, my son Phillip ran into financial trouble in college. Unbeknownst to me he had racked up $2500 of debt on a credit card that I didn’t know he had. I was mortified. I thought I had educated him about money and staying out of debt. In fact, I had taught him the same lessons my father had taught me — except there were no credit cards when I went to college.

Even though I had told my son plenty of times how to be financially fit, I never showed him by teaching him about the perils of credit cards. He was with me when I used my credit cards during the “just charge it” times. But he was not with me when I paid off the bills each month, and he didn’t realize that I made sure to pay them off each month to avoid interest charges.

It was this sobering experience that started me down the path to educate as many children and adults as I could on how to be financially smart. That same year I started working with our school system to try to include financial education in their programming. But it was far from easy. There were a number of road blocks in the way, and I started to look for other ways to provide financial education outside the traditional school curriculum. Fortunately, by 1994 my son Phil was firmly back on-track and out of debt.

Rich Dad Poor DadIn 1997, I co-authored the book Rich Dad Poor Dad with Robert Kiyosaki. Together, we formed the Rich Dad Company and co-authored 14 other Rich Dad books that have been translated and sold around the globe. Rich Dad Poor Dad’s success as a New York Times Bestseller for over six-and-a-half-years proves the tremendous need and importance of providing financial education.

In 2007, I decided to refocus my efforts back to where it all started — the passion I had when Phil got into credit card debt — financial education for our youth. I left the managerial board of the Rich Dad Company to pursue that goal.

Today, I have developed a combination of educational and experiential learning tools that help parents and interested adults teach their kids financial education — not by just telling them what to do, but by showing them in ways they can understand. In fact, they have the opportunity to earn while they learn, by becoming YOUTHpreneurs and owning their own companies. It is through setting goals and achieving those goals that we can turn the “entitlement” attitude back into the “empowerment” attitude! As these young people learn how to create their own wealth, you not only see their self esteem sky rocket but you also see their willingness to give back to those less fortunate.

A brighter financial future
We need to give our kids a chance to succeed or fail while they are still at home. Let them have some responsibility with a job. Encourage them to save some of their earnings, give some to charity, and then spend a little. They will learn much more through trial and error than through lectures and assignments. They will most definitely surprise you.

As you teach your children, you may find that you are learning something about money as well. The true bonus will be the memories created from the time you spend with your child and the knowledge that you are giving your child the gift of a lifetime — financial education!

Although it is great that this organization wants every kid to have 4 hours of financial literacy ed in high school, the lessons need to start much earlier.

From the time my kids were babies, every time they saw me charge something, I told them I was only charging because I already had the money in my bank account. We have always talked about major family purchases in terms they could understand: Would you rather go to Disneyworld once, or have family dinner at Friendly’s once a week for two and a half years? We also talk about commercials, what they try to make you think about the product, and whether we believe it.

I believe that most financial training starts in the home. Even if a child is trained to curb his spending habits, he is much more likely to give way to bad habits if his family is stuck in the same problem. For this reason, I think that we should hold “family financial training” classes in which the entire family is taught good financial practices.

Sound financial education should definitely be in schools…assuming we can get *real* financial education and not something sponsored by Visa…but more importantly, the example needs to be set at home.

Not that I blame anyone other than myself for my financial mess, but I never heard any sort of smart financial advice when I was growing up. I spent every dollar I received and no one ever told me I should stop to save any of it.

What ever happened to personal responsibility and parents teaching these things? I’m concerned financial planners will see this federal money as a pot of gold and create a new welfare for their industry. If as a society we insisted on having people (and companies, for that matter) pay for their mistakes rather than get a bailout we’d all be better off.

I think this is a great article and I’m happy to see that someone is working hard on getting our children educated. Although I believe the education has to start much younger than high school/college, I think some education at any age is better than nothing. Unfortunately I think most people won’t learn the true lessons of finance until they are forced to really think about their spending due to a job loss, sickness, recession etc. Most people (especially teenagers) have the “it won’t happen to me” attitude. Spending habits need to be learned at an early age and kids need to learn the difference between wants and needs not just how a credit card works.

I’m surprised to see Get Rich Slowly inviting the author of “Rich Dad Poor Dad” to post an article. This is the most dangerous financial advise book out there. It shuns diversifying, frowns on higher education, advocates multilevel marketing, and promotes those widely expensive “get rich quick” seminars.

John Reed has detailed analysis of the book that is worth a look to anyone considering following the advise of Rich Dad Poor Dad:

Law-breaking advice
* Advocates committing a felony: have rich friends for trading stock based on non-public inside information, he says “That’s what friends are for.”
* Recommends tax fraud by deducting vacations and health club dues
* Brags about using a partner weasel clause in which his cat is his partner

I agree with above comments that financial education needs to begin much earlier. While I do believe that educating the public about the knowledge of personal finance is important, I think teaching them the *behaviors* needed to be secure financially is more important. And, if you are going to teach behaviors, yes it needs to begin much earlier.

I work with young children every day as a teacher. If I ask any of them if they could build savings by spending more than they earn, they would reply “no.” It’s simple math. Obviously adults are aware of this too. To change the tide of consumerism and overspending we need to first teach sound money behaviors.

My wife teaches kindergarten. Many of the students who come to her don’t know how to stand in line, say please and thank you, wait their turn, and many other social skills that everyone else thinks should be common knowledge. She spends the better part of the year teaching these *behaviors.* By the time they reach me in 4th grade the behaviors have been reinforced so much that it’s all second nature and they don’t have to think about what is correct or not. That’s where they need to be in their personal finance decisions when they get out of school.

That brings me to the second issue facing our young people. Marketing. Large companies are allowed to market directly to children, through television and now directly in schools. We saw this as an issue with the tobacco industry, yet we fail to see the harm if every company is telling our children “you need our product to make you happy.”

@Appleman you say “What ever happened to personal responsibility and parents teaching these things?” but the comment directly above you states “that no one ever told me I should stop to save any of it.” In schools now we teach about character education; how to be responsible, honest, caring, to have integrity, and many other character traits. While there are a lot of great parents out there teaching their children important characteristics, there are a lot of kids that come to school who know very little about these traits. I see personal finance in the same realm. To ensure as many kids as possible are exposed to the information they need to be taught the behaviors early and often to make sure they stick.

I applaud your efforts and your decision to shift your focus on core principles of personal finance and leave the “Rich Dad” group. The message with Kiyosaki has changed to market to the “get rich quick” mind set, clearly not the demographic of the readers here.

I read both the Rich Dad books years ago. Because I grew up with no real financial training beyond general prudence, the material was truly helpful. Yet I don’t see the message as one that builds character or community, and those are just as crucial to a good life as financial education. The 6th commenter made points we should note.

I’m surprised that the Rich Dad series ignores the many parts of personal finance where our self-interest overlaps with the public interest, i.e. we can do well by doing good. For instance, when we learn basic techniques for saving gas, we both save $500/year and create less pollution in our community. Tips here http://www.diamondcutlife.org/how-to-save-money-on-gas/

I’m happy to see someone fighting to get financial education in schools. It’s really crazy to me that I spent hours and hours learning things I never use in real life. Luckily I had parents who taught me the value of money and how to never go into debt.

Some people aren’t as lucky and personal finance in school could provide the guidance that their parents never gave them.

While I applaud the idea of a required course in financial literacy in principle, in practice the federal law being proposed would cause an uproar on college campuses (campii?) across the nation.

Right now, there are no federally-mandated courses at the college/university level in the US. Many States have mandated college courses (in State history or government, for example). And universities often struggle with incorporating those mandates into an ever-shrinking degree. (In the State of Texas, we recently capped all four-year programs to 120 semester hours — many disciplines had to drop numerous courses within their major requirements to get in under the wire.)

In this environment, having the federal government come in and legislate four additional hours of credit into every degree program would be effectively untenable. I support the aims, but this is not a winning strategy.

Second, I see eye-to-eye with Juan234. “Rich Dad Poor Dad” may be a ‘best-selling’ book, but that does not mean that the information in the book is worthwhile. In fact, the ‘advice’ given in the book is actually a story about growing up in Hawaii around 2 different fathers. While there are ‘some’ good lessons learned the overall lesson of not worrying about college, climbing the corporate ladder and simply owning your own business (and therefore destiny) is something from a Utopian world for most people.

I’ll let this article do the rest for explaining: http://www.slate.com/?id=2067175 However, I must say Bravo to Ms. Lechter for using this forum as a shameless plug to sell more books. Hopefully the level of educated people on this site exceeds those that would typically purchase this book.

Thirdly, I am all about Financial Literacy, but that has absolutely nothing to do with reading Rich Dad Poor Dad and it is not going to be solved in a 4 hour class held in universities and colleges.

Financial Literacy MUST start at a very young age, around the 3rd grade if you asked me and should be taught at least and hour or two per week! Think about, after college or even high school, how much time do we spend thinking about money, our careers, paying bills, budgeting, etc. This same percentage of time should be reflected in our classes rather than spending 20% of our time learning about why Australia was originally a penal colony (worthless).

I agree. Rich Dad has the tone that is common in the personal finance blogging scene (GRS excluded for the most part), which is “the way to lots of money without having to work is entrepreneurship” and “don’t think; just dive in”. Both are ridiculous and dangerous. I too have wondered how many lives have been ruined because people read these words (in Rich Dad and in PF blogs), took the advice, invested their savings and credit in a business, and — as most businesses do — failed.

As one of the richest countries in the world — one in which average people have bank accounts and credit cards and retirement accounts and own stocks — I find it hard to believe that our education on financial matters is really lacking that much. Sure, lots of people abuse their credit, but that’s not because they don’t know how it works. Go ask any smoker if they know that smoking is bad for them, and they’ll tell you that, yes, they know, but they do it anyway. I’d figure the same is true of credit card debt. People lack the willpower to give things up, even when keeping those things will probably get them into trouble farther down the line.

It feels a lot like anti-drug programs, or sex education programs, who’s real goals aren’t to teach you about the actual effects of drugs, or the actual experience of sex, but to discourage you from participating. Are these “financial literacy” classes any more than an anti-credit-card seminar in disguise? We can all see how well the sex ed and anti-drug programs are working. Why do we think this will work any better?

Like J.D. says — personal finance is more mental than mathematical. Teaching kids about compound interest or how minimum credit card payments work isn’t going to compete with the feeling of having that new flat screen TV in their dorm room, where the whole floor comes to watch football games. When one of your options is “have the place where everyone comes to party”, it’s going to be hard for a lot of college students to see the downside, even when they mentally know it’s going to be difficult to pay the debt off.

Anyone trying to implement a program like this should think long and hard about what they’re really trying to accomplish, and whether their proposed plan is likely to have any actual effect.

1. Kris is going to kill me that I left the “molecular composition of a carbon atom” thing in there. I’ll change it. She’s a chemist, and she’s been bugging me to correct this for months, ever since Sharon submitted this post.

I don’t feel like Sharon is attempting to sell books. If she were, I wouldn’t have approved this post. She mentions the Rich Dad thing so that people understand who she is. She’s moved on and is now promoting financial literacy, and that’s something I can get behind 100%.

As long as the government is giving out loans the stuff about financial literacy from the government is bogus. I bought into the “good debt, bad debt” thing. I never got a credit card, I lived on campus, ate on the meal plan, and very rarely went out – always using cash when I did. My only debt was (and is) my school loans. What I didn’t expect was to become ill after finishing school. Since I am not totally disabled I have to pay loans (which is fair) but I can’t work in my given profession or for as many hours a week as I would need to to really pay off the loans. I’ve gone on graduated repayments and keep seeing my loan amount go up instead of down. I could have taken two years longer to finish school and worked my through — I was told not to, that it was a waste of time and not to worry becuase student loans are “good debt.” I certainly don’t feel that way now. A government program for student loan holders would not have helped me and I suspect will do a disservice to many students who would be willing to take longer to get through school so as to do it debt free.

There are essentially two major parts to financial literacy:
1) Learning to manage your finances so that you avoid excessive debt (remember not all debt is bad particularly if it at low locked in rates and is for an appropriate acquisition e.g. your house) and save money over the long term.
2) Learning how to invest.

Unfortunately, Sharon Lechter’s post, and many of the comments focus on teaching kids how to achieve part (1) above, with no attention paid to part (2).

And let’s face it, federally mandated education programs and mandatory classes will only go so far – they will be competing with all of the distractions that go with childhood and teenage years that are far more exciting.

Which is why I would suggest using games as a method of teaching finance where possible. But unfortunately for the US, it has pretty much banned the use of a game which would be very effective at teaching young people about risk, reward, investing, and money management – poker.

In the 1800s, poker was actually used as a way of figuring out which people were good at managing money – “The Poker Face of Wall Street” describes this well.

So really, there are two parts to the problem of creating financial literacy. The first is to actually make finance a part of the education program, which can be made law until the cows come home. The second is to make finance education interesting – which is where massive opportunities exist, but which will require some creativity to achieve.

I got about an hour and a half’s financial education at school when I was about 15, and it was useless. We learnt how to write a cheque. Initial any changes you make and make sure no one can add any extra zeros. We were given a fantasy budget for a university student, but obviously no one would actually spend as little as they said on going out and as much as they said on eating properly. The fantasy budget was just that – a fantasy!

Financial education has to be interesting and pointful, because what I got was awful and nearly put me off learning about personal finance for life.

I think Financial Literacy at a young age is key. I give Ms. Sharon Lechter a lot of credit for volunteering as part of the President’s Advisory Council on Financial Literacy. What I find interesting is that the President failed to include Mr. Dave Ramsey of The Lampo Group, Inc., Mr. Howard Dayton of Crown Financial Ministries and Mr. Phil Lenahan of the Veritas Financial Ministries. I think these gentlemen would have helped out tremendously as well. A four-hour course in financial literacy at the college level though will be woefully ineffective. I think non-profit organizations such as Crown and Veritas do a much more effective job and it definitely takes more than four hours, even for a young person of limited assets and means.

I am sure Sharon has some amazing information on her website, and being 20 with an ‘entrepreneur’ mind, I was pretty excited. However, that website just has too much going on and would be a lot more useful if it was presented better ~_~.

Rich dad, Poor dad was actually the start of my own ‘financial education’ and I think it is a good book. Saying that, I do not agree with everything in the book, but I also do not agree with everyone on GRS.

As far as having seeing schools start teaching more on financial education, I doubt it will prove much of an impact if it does happen. The only way I can see success in it is if the schools have some sort of real life simulation courses. A class where you have fake money, fake job, fake bills, etc. You would get a ‘paycheck’ every week based on your fake job and then you could do what you wanted with it (save, spend, pay bills, etc). They could apply for credit cards, invest in stocks, etc. You also could get fake cash from reading and writing reports on various books, but it would be optional and not just some ‘required assignment.’ You’re grade would be based on how much money you had @ the end.

This would have a disadvantage as well because there wouldn’t really be anything that the students could spend there money on that was ‘fun.’

Unless they really incorporated it into the school system. Allow students to buy food, homework passes, computer game time, etc. I would have loved a class like that and it definitely would have taught me a lot about money.

While I agree with you that government needs to stay out of higher education (the last source of education that is somewhat shielded from politicization), I don’t agree that there is no need for financial education. I think it is a huge failure that colleges aren’t already offering courses like this in their core classes. The thing you miss is that the human mind is tailored to think linearly and has a LOT of trouble doing non-linear calculations like exponentiation (which is what compounding is).

It is not as simply as “doing something one knows is bad”. There is a lot of evidence indicating that individuals do not KNOW how bad getting into debt can be until they go through the experience. That’s why we need education. After all, isn’t that the whole POINT of education? Otherwise, we would learn everything by trial-and-error…

Because I got a message about this behind the scenes, let me re-iterate that it’s okay to post links to relevant articles on your site. The key here is the word “relevant”. Will (#15) has a relevant article on Len (#16) is close. Alison’s link in #10 is a big stretch, though I’m leaving it here as an example of the sort of thing I generally remove.

Why do I remove unrelated links? Because if I don’t, this comments section turns into a festering pit of self-promotion. I really don’t mind if you share relevant material, but I don’t like it (and neither do other readers) when you link to posts at your site that have no bearing on the discussion. (And Alison, under normal circumstances, that means your post in this thread.)

Finally, I absolutely remove “sigs” that contain links back to sites. You can put a link to your site in the comment form so that it links to your name. All of the other commenters know that this works. If you want people to go to your site, leave an insightful comment, and people will click back to see what you’re about. But if you include a URL (etc.) in your signature, I’m just going to edit it out.

This policy is not new, but I have some people confused about what I do and do not let slide in the comments.

Again, this is all to keep the discussion civil and useful to all, and to prevent it from becoming cluttered with useless stuff.

I totally agree that we need to do a better job of financially educating everyone in this country, however a government mandated program – especially at the federal level – is a terrible proposal. The President’s Counsel on Financial Literacy will have the same effect as Sex Ed, DARE, the President’s council on physical fitness, etc. More federal spending, more bureaucracy, and less freedom.

Our federal government needs the financial education. It encourages poor mortgage loans, it encourages large amounts of student debt, its programs always lose money. The federal government always spends more than it takes in and it only invests in companies with a proven track record of poor money management.

Furthermore, if colleges really taught good money management, most of them would go out of business because students would quickly figure out that the cash that they are laying out for an education is a poor investment.

Using schools to educate people about financial literacy is a noble goal, but I’m not sure how effective yet another required course can be in making a real difference. For many youth–not just those who rely on parents for financial support, but also for those who earn some kind of income–money matters are really very abstract and take time and experience to learn and absorb. Maybe a four-hour course can teach some practical techniques and a few platitudes about debt and credit, but it will likely not change most students’ attitudes about more deeply rooted issues, such as balancing self-esteem with “retail therapy,” looking through and analyzing our media-driven, hyperconsumerist culture, understanding the real function and value of money, and so on. These “base” problems–the stuff that makes up our values and even our psychological leanings–need to be addressed at length (preferably early on in life) via good parenting, role models, exposure to suitable experiences and media, and other features of culture.

Sure, a four-hour course can’t hurt, but where’s the funding for this coming from? And will it increase the workload of already overworked teachers and counselors? (Schools are constantly being asked to take on more and more roles. Can they really be everything to everybody?) If the goal of this program is to give a brief overview of techniques and scenarios to students, then maybe that can help. But as I said, it’s all very theoretical to many students. Unless the lessons are reinforced somehow, the course will simply be yet another forgettable and inconvenient obligation that the student has to squeeze into a busy schedule of studying, working, partying, shopping, and so on.

I’m sorry if I sound too cynical about what really is a laudable goal. However, I do teach college students, and for many, even studying current events (!) is abstract–many don’t pay much attention to what’s going on in the world. (Many don’t even pay much attention to the course syllabi!) The ones I work with are generally concerned about balancing schedules, getting high grades, meeting mates and friends, and other things related to immediate needs and navigating obstacles in the here-and-now. Perhaps a better, but less charitable approach would be to require that students demonstrate financial literacy skills in order to qualify for financial aid or a loan. Of course, this would probably limit opportunity to a great degree, but that’s the rub: open opportunity with great risks, or limited opportunity with fewer risks.

I’m a little disappointed in the quality of this post- it sounds a bit too sale-y to me – either for RDPD or for the other work that the OP is doing… I like reading this blog because in a lot of the articles, salient points in books are summarized and evaluated, rather than it being a sale point for one to buy other things. I dunno – not my favourite post.

I think the key for financial education, however, is responsibility. Either a kid at 18 is responsible for his/her finances or he or she isn’t, but there are definite mixed messages going on here.

Take my coworker for example – her stepdaughter has a trust fund for education, and the daughter goes to school, parties, works about 20 hours per week and lives with relatives to reduce costs. The thing that aggravates my coworker is that she will then come home for the weekend and ask for money for food/gas/ cigarettes, etc. So, my coworker’s husband was going to let the daughter have full access to her educational trust fund, and give her ultimate responsibility for it. My coworker thought it would be a bad idea, and instead wanted to give her less access to the fund.

For this, I’m of two minds. My coworker said that she wanted the stepdaughter to get her degree, and that the fund was there to help with tuition, not partying. But I think that is part of *responsibility* is to be given that level of trust to be able to screw up if necessary. I’m sure everyone has goofed up with money at least once, part of the whole package of being fiscally responsible means being given the authority over your own money.

I’d love to see them say to her that this was her money to do what she wanted with – but that there would be no more – ever. This could be her downpayment for a house if she watched her pennies, or it could be gone in a summer – but either way that was it. That gives the girl the authority to make decisions, but it also gives her a reward for being frugal. Right now her only reward for being frugal is that it means she wouldn’t be able to party with her friends, and she would be saving her dad’s money – which isn’t much of a motivation.

I think the same goes for credit cards and etc with kids – give them to them I say – but also explain what happens with interest rates, payments, credit scores, etc if payments aren’t made on time. Talk about what debt does, how payments are caculated and then let them figure their path – if they screw up a bit, they can dig themselves out just fine. Knowing how to manage money, for some, comes from doing, for others it comes from reading. It also depends on the class of the person as well – if someone is from a poorer household, they may be able to be frugal when they have little money, but when they get money they may not have the skills or knowledge about how to save… likewise when someone who is from a richer class has to cut back, they may not have those skills. I think parents would have the best clue as to what their kids need for education in this regard, rather than the state…. but it also means that parents have to be honest about their *own* financial situations, which often doesn’t happen…

I had a lot of financial education as a child and still ended up with significant debt. It took actually going through real life “learning experiences”, and I STILL have a high tolerance for debt. I doubt I am unique. Heck when I see stories about debts of $2500 I have a tendency to think “That’s nothing. You can pay that off in a month with hard work and frugal spending.”

While many are ignorant, a lot of highly educated people still have problems and issues due to personality traits,preferences, stubbornness, whatever. I am skeptical that mandated financial education is going to do much to change that. People are going to ( and should be free to) make bad choices.

Nutrition and Physical Education have been mandated for a long time. At least when and where I grew up and for decades previously. I don’t really think that’s working out. The same can be said for math, science, English, civics,etc.

I am 30. I am young enough to feel like I was a teenager not that long ago, but just old enough to sometimes feel old in some environments. When I was in high school we had to pass 4 or 5 state tests ( Reading, Writing, math, Citizenship, something). I thought they were reasonably difficult. Anyone who graduated should at least have basic knowledge in these areas. Yet if I tried to have a conversation with most of my peers, I would feel like the Luke Wilson character in the movie “Idiocracy.” This applies to many college graduates as well.

I realize the legislation discussed pertains to the college level. But I am sure most supporters advocate mandated state education for younger students as well.

Health and PE are mandated. People are typically obese and sedentary. Math is mandated and most people probably can’t convert a fraction or multiple two digit numbers. Civics is mandated and most can’t name the President let alone the branches of the federal government.

Education is good, but meaningful education can’t be mandated. People who have an interest will seek it. They will read blogs like Get Rich Slowly or Google specific information,etc. Forced to sit in a classroom, 90%+ will “learn” something long enough to pass a class or test.

There are any number of important things that people SHOULD know that aren’t taught in school. Kids already go to school way too much, IMHO. Even when taught at home by parents many things just don’t really “take” until a kid grows up or really wants to learn.

I truly believe that most of the mess our country is in is due to our lack of financial literacy. Ideally, financial responsibility should be taught at home beginning at an early age. That age should be when the child receives an allowance.

Given that many adults do not understand nor know much about financial literacy, it is up to the schools to educate this next generation before they become adults. I want to emphasize that not all adults lack financial literacy, but enough do.

In my experience as a business owner who teaches money management and financial literacy to adults and teens, many adults who want their teens to be financially educated, ask me to help them as well.

It saddens me when I read that freshmen entering college are already have $1500 in credit card debt.

Finally, I have written two letters-to-the-editor supporting the need to teach financial literacy in the schools. These may be found on my website under “in the News”. (JD, I respect your comment #29 and will not include a link, since anyone reading this comments knows what to do.)

I do think we spend so much time defending our points of view (We must do this! or We can’t do that!) that it makes us myopic.

Look as a community, I think 99.9% of us believe financial education is necessary. We have more choices than our parents did.

We don’t have to be locked into one delivery system. We can mix and match.

There could be online education learning modules that could deliver self-learning options.

Education does not have to be bound by a physical classroom.

Another option is that it does not necessarily have to be tied to an academic program but included as part of freshman orientation, a sophomore symposium or a pre-existing club on campus could help to deliver this information.

I’d also would want it as a pre-requisite for vocational financial aid packages as well.

Before students obtained education loans you would have them work though a financial module that visually showed them the amount of debt they are taking on.

I understand that many of you feel your tax dollars should not cover every possible social contingency that a citizen might face. Neither do I.

Financial education is necessary. If we could come up with an expanded view of how to deliver that information that isn’t necessarily parent dependent it would be worth it.

@Michael #23, I agree on both counts. College is too late. The credit card companies are marketing to young children. The financial teachers you mention have outstanding resources, especially Dave Ramsey who has a high school cirriculum “Foundations in Personal Finance” and also resources for parents to teach small children “Financial Peace Junior”.

We wouldn’t have had a subprime mortgage crisis (or even a MARKET for it) if people understood half of what Ramsey alone teaches, let alone all three men you mentioned.

I strongly agree with this article. I was always taught from a young age about saving money. My parents were never in debt (except for a house and cars). I had a bank account when I was under 10 thanks to my Dad. I didn’t know much about credit cards until I hit high school, but I did know that I didn’t want to pile up debt at 18 years old. I made it through 5 years of college with $0 debt, not even student loans.

I have many 20-something friends who are really struggling to make ends meet because of credit card debt that started the day the turned 18. Some of them try to fix their credit history by going further into debt with car loans. That is NOT the way to improve your credit score, paying off your old debt is the way to help your credit so you can buy a home in the future. It makes me wonder what their financial background was like growing up.

I grew up in the 60′s with 2 sisters and a brother. My father worked 4 jobs and my stay at home mom was a seamstress. No credit cards–if they needed something they would save up for it. My youngest sister and myself absorbed these lessons and we are currently only holding mortgages as debt. We save for the things we need or want and use credit cards wisely. My oldest sister and brother both had major financial problems–one had to go into bankruptcy and the other has no savings.

My point is that you can live in a fiscally responsible environment but it is personal what you take from it. I have two sons now–my husband and I are prudent with our money and have taught our sons by example and explanation. However, my oldest son got two credit cards in college and went wild–he is still paying off debt and will be doing so for the next few years. My youngest son works hard and saves; he only buys things he truly wants and has the philosophy to save for the cost of the item.

“I understand that many of you feel your tax dollars should not cover every possible social contingency that a citizen might face.”

This isn’t the issue. The issue is that our economy is built on spending, the government’s economists are Keynesian, and the government’s interests are misaligned with those of prudent personal finance. Even *right now* you have people in the government “cautioning” of a reflex to “over-save”. We had “be patriotic; go spend!” messages being sent by Bush and others after 9/11.

Whether you agree with these items is not the point. The point is that if you establish a mandated personal finance course, funded by federal tax dollars, it will become another tool to promote the economic agenda of the federal government and probably its special interests.

What really needs to happen is for us not to pass *legislation* to create these courses, but simply go to the universities and present our case. It seems to me that passing legislation is just a way for us to not have to convince individual universities that it is the right thing for their students. Otherwise, I don’t know why we would choose forcing their hand over presenting a convincing business case.

Financial education is paramount for all ages. Kids are too easily slipping into bad habits because they were never taught anything better! I think Sharon makes some great points.

The best mix result is going to be a combination of education from parents at home AND in schools. Another bill has been introduced in the House and Senate, the Financial and Economic Literacy Improvement Act of 2009, that I think has some real potential. It would bring financial education to both secondary schools and K-12 students.

@Independent Operator, look I did say that there were other ways to deliver the information. The U.S. Government does publish consumer financial information via the Consumer Information Center at Pueblo. There is free content available.

Now let’s jump the grid a little bit. What if our government put out the call for Free/Open Source programmers, gamers or what have you to create a financial education application?

It would be a donated gift to the American people. Financial professionals who choose to could prepare content that would be reviewed by the opposing side and neutral parties to get to the nub of what is needed. I’m just brainstorming here.

Volunteers from all economic levels could give it a shake down. This is not impossible.

Now, if some smart entrepreneur type person took a look at it and said it was crap and built something better, score.

You don’t want it governmental based fine, I get it. Would you be willing to kick in a few dollars to support a national non-governmental initiative to create said program?

What about a hybrid program?

Having said all that if we as a country are proving financial aid to college students I think there should be some way to make sure they understand the obligations they are signing. The three point type on the form is not enough.

I will say this again; there is not just one way to do this. It could be governmental, it could be a non-profit with community based support. It could be something not yet imagined.

I think that financial literacy should be taught in schools. From Kindergarten through college. Some posters have commented that this should be something taught at home. I think from our current economic climate it is obvious that the parents wouldn’t know where to begin. Much like sex ed, financial literacy is a taboo topic that many parents are unwilling or unable to discuss with their children.

I’m still not sure that it would do any good. Our cultural climate promotes a completely different image than the one that would be taught at school, and culture always wins. Until fiscal responsibility is cool, children will be marching down the road to debt.

Since writing this blog I am happy to announce that there are now additional bills on the floor of the Senate (S. 638)and House (H.R. 1645) that will require financial education of K-12 students as well as post-secondary students. I encourage you to review this legislation. I have a summary of these bills on my website http://www.slechter.com/critical-financial-education-bill-introduced-in-senate. These bills address appropriate non-profit involvement to work with the states to provide quality financial education.
I also agree with many of your posts that experiential learning is the best way to learn, that financial education must start at much earlier ages, and that the education must include curriculum about saving as well as investing. While it is true that most people learn about money at home, would not their parents benefit from their children learning about it at school? Then the parents may also be able to learn from their children. I ask for you to use your passion about this topic to help demand that relevant financial education be taught to our children and our families. My intent is not to “sell” anything but to raise awareness and support for the need for financial education. Please join me.
Thank you!

Regardless of the whole Rich Dad Poor Dad association I happen to like Sharon. I have met her personally and she has pure intentions. Her advice saved me lots of money when I was setting up my company.

One particular interest of mine is the financial services advertisements often promoted by Google through Adsense and Adwords. A number of these advertisements are promoted on the blog posts of Get Rich Slowly. Indeed on the “Pursuit of Financial Education” there are / were Google Ads for the following services:

- Tips £174,934.50 Profit; Copy a Genuine Professional Punter £495pm – One Week FREE Trial HorseRacingPro.co.uk (not sure of the origin of this but it seems somewhat over-promising)

- Stock Market Secrets; Interested in trading shares? Free Stock Market Course (a course promoted by the infamous Darren Winters of WinInvesting – you can see some of the critiques of him by Googling)

My feeling, as an investment professional, is that these services are highly unlikely to produce anything like the promised returns, and that frankly they are dangerous to investors, particularly novice investors.

And unfortunately, since they appear on JD’s site here, they may be taken seriously by some readers of the site.

I recommend that JD tests out the new Category Filter Feature being developed by Google to remove advertisements from such entities (under the “Get Rich Quick” category I hope), since the message these advertisements tend to promote is completely at odds with the excellent message and ethics of this site.

I would be very interested to hear readers’ thoughts and feedback on this topic.

I do not trust anyone affiliated with Rich Dad, Poor Dad. It is one of the most poorly written books I’ve read. It was full of silly advice. I laughed out loud while reading some of it; wondering how this could ever be a best seller. That was when I realized I had spent my money on it due to popular sentiment. I vowed never to follow the crowds like that again.

My daughters and I did something that was really cool (in a financial sort of way!)yesterday. Our public library offered a financial literacy program for teens offered by our county extension office. There were about 10 adult volunteers from the community (Kiwanas, I think). Each sat in front of a sign that read “Housing”, Utilities”, Transportation” Food, Child care, etc… Each kid pulled cards from 2 bags: 1 was for what career he or she would have and how much that career paid, and what amount of education was needed for this job, and the other was whether they were married, and how many kids they had, and if their spouse had an income.
Each volunteer talked with each kid about their options in housing, transport, etc.. based on their income. They all had to start at the tax table.
They had to visit every station to see how much they could spend on all that is involved in life. One daughter picked being a HS dropout working for minimum wage, and my other one was in the military as a 2nd Lutenant. Both were very wary in how much they spent on this or that, and they both asked for the help of the “financial advisor” table to help them make ends meet
I advise a group of middle and HS aged Girl Scouts and am going to invite them to come and talk to our girls. If you work with teens,check out your extension office and see what they offer. This was a really great program!

Advertiser Disclosure:
Many of the savings offers appearing on this site are from advertisers from which this website receives compensation for being listed here.
This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all deposit accounts available.
Editorial Disclosure: This content is not provided or commissioned by the bank advertiser.
Opinions expressed here are author’s alone, not those of the bank advertiser, and have not been reviewed, approved or otherwise endorsed by the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program.
UGC Disclosure: These responses are not provided or commissioned by the bank advertiser.
Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Disclaimer: Rates / APY terms above are current as of the date indicated. These quotes are
from banks, credit unions and thrifts, some of which have paid for a link to
their website. Bank, thrift and credit union deposits are insured by the FDIC
or NCUA. Contact the bank for the terms and conditions that may apply to you.
Rates are subject to change without notice and may not be the same at all
branches.

Disclaimer:All information provided on this site is for informational purposes only. GetRichSlowly.org makes no representations as to the accuracy, completeness, suitability or validity of any information on this site and will not be liable for any errors or omissions in this information or any damages arising from its display or use.